All three major indexes continued their winning ways today, turning robustly positive as the Street found direction on the election of a new Pope in Rome. Shares of Timberland (NYSE:TBL), Martha Stewart Living Omnimedia (NYSE:MSO), and Texas Instruments (NYSE:TXN) were among the big gainers on the NYSE, while the tech-heavy Nasdaq found winners in Altair Nanotechnologies (NASDAQ:ALTI) and Dynamic Materials (NYSE:BOOM).
"This was just the thing the market needed to dispel last week's uncertainty," explained Bugiardo Capital trader Illie Freehly. "I think the markets wanted to see decisive action from Rome, and they got it today."
OK. I can go only so far before I come clean. There is no Bugiardo Capital -- at least there shouldn't be, since bugiardo is Italian for liar. And Illie Freehly, well, you can figure that out. The reason I've made myself into a bugiardo here is to drive home a point that, in my opinion, we can't make often enough. Let's start with the obvious.
As important as Cardinal Ratzinger's election is for millions of the world's Catholics -- and hey, I'm one of them -- it would be ridiculous to conclude that his selection had anything to do with the direction of U.S. stock indexes today. Frankly, I'm sort of surprised that we haven't seen a serious attempt at a headline like the one at the top of this story, as silly as it would be.
That's because every day, many times a day, we're treated to titles that attribute the market's short-term movements to all manner of stimuli -- many of them every bit as nonsensical, from inconsequential macroeconomic data to far-flung political events to a single company's quarterly results. Whether the assertions are correct or even demonstrably plausible doesn't matter at all to the folks who write this stuff. The journalism machine refuses to say " I don't know," and it takes solace in the knowledge that no one can prove that this daily tripe is not true.
If the indexes had dropped today, I guarantee you the headlines would have attributed the decline to the billion-dollar loss at GM (NYSE:GM), just as they were all proclaiming the death of all "tech" after IBM's (NYSE:IBM) dismal showing a few days back. But they didn't, and do you know why?
Me neither. The market's daily gyrations are completely inexplicable. No matter what those headlines or cherry-picked analyst quotations claim, no one knows why the aggregate indexes move one way or another on 99.9% of trading days. And here's a big secret: There's nothing wrong with that. It's only by admitting that you can't know everything that you'll be free to concentrate on the things that do matter.
Our advice is, at it has always been, to pay attention to the merits of individual companies, buy right, and sit tight. The short-term thinking encouraged by the live-shot, breaking-news-addicted press is not only bad for your portfolio; it's also of dubious value for your mental and spiritual well-being.
For related Foolishness:
- Wouldn't it be great if nothing happened today?
- Learn a few lessons from the jumbotron, home to the bobbleheads.
- Maybe Texas Instruments' gain is overdone.
- GM's problems are its own.
At the time of publication, Seth Jayson had positions in no company mentioned. View his stock holdings and Fool profile here. Fool rules are here.
